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17 December, 2020 Open access

Debt clients are more likely to have rent or council tax arrears, receive universal credit, or be out of work since COVID-19 crisis began

Survey of StepChange clients also finds that almost half its clients report material deprivation, such as going without meals or rationing basic utilities

Debt clients are more likely to have rent or council tax arrears, receive universal credit, or be out of work since the COVID-19 crisis began, according to new research from StepChange Debt Charity.

In Covid-19 Client Data Report, StepChange explores the experiences of its debt advice clients during the coronavirus pandemic using data gathered through advice sessions and online survey data. Key findings include that a higher proportion of clients are seeking advice about rent and council tax arrears, fewer are in employment, and more are relying on universal credit than before the pandemic -

In addition, StepChange says that people are facing significant impacts on their living standards as a result of debt pressures, despite support measures from the government and the Financial Conduct Authority such as payment holidays for mortgages, credit cards and loans, the temporary ban on evictions, and the £20 per week increase in universal credit.

In particular, StepChange highlights that -

As a result, while StepChange welcomes the temporary, emergency measures that have supported many people from suffering far worse debt outcomes during the crisis, it calls on the government, regulators and creditors to recognise the long-term nature of the interventions that will be needed to help individuals recover from the debt legacy of the pandemic.

Commenting on the report, External Affairs Director at StepChange Richard Lane said today -

‘Hearing the testimony of people who are suffering right now as a result of their debt burden is tough but vital for policymakers.

What is particularly shocking about Covid-debt is how quickly the impact of the Covid kicked in and resulted in financial stresses, how payment deferrals have helped but also postponed the problems, and how much further there is to go before it ends.

StepChange clients bear witness to how vulnerable we are as a nation to the risk of personal debt, and the harm of its consequences.

They provide an important level of insight into debt during the pandemic, based on real life experience, and show why ongoing help is going to be needed if people are to escape long term debt problems arising from the period of the pandemic.’

For more information, see Our clients explain in their own words what being in debt in the pandemic feels like from stepchange.org